Australian Broadcasting Corporation v Redmore Pty Limited

[1988] HCATrans 209

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S83 of 1988

B e t w e e n -

AUSTRALIAN BROADCASTING CORPORATION

Appellant

and

REDMORE PTY LIMITED

Respondent

MASON CJ
BRENNAN J
DEANE J
DAWSON J

GAUDRON J

C2T 1 / 1 /HS 1 15/9/88

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 15 SEPTEMBER 1988, AT 10.19 AM

Copyright in the High Court of Australia

MR M.G. SEXTON:  If the Court pleases, I appear for the

appellant in this matter. (instructed by

Bruce Donald.

MR B.W. WALKER:  May it please Your Honours, I appear for

the respondent. (instructed by Westgarth Baldick)

MASON CJ:  Yes, Mr Sexton.

MR SEXTON:  If the Court pleases. Your Honours, I will

hand up an outline of argument.

MASON CJ:	Thank you.
MR SEXTON:	The starting point for the appellant's

submissions, Your Honours, is section 70(l)(a)

of the AUSTRALIAN BROADCASTING CORPORATION ACT
of 1983, and I think Your Honours have a copy of

that statute.

MASON CJ:	Yes.
MR SEXTON:	Your Honours, I was going to look at the

legislative history briefly of that section which

is discussed in part in the judgment below of

Mr Justice McHugh, and then go to the reasons

why, in the appellant's submission,

Mr Justice McHugh was in error in finding that

the section did not prevent the entry into the

contract in question by the Australian

Broadcasting C oripora t ion. I should say one

thing about the paragraph 1.1 of the outline

of argument. It says that no higher amount

than $500,000 is currently prescribed by

regulation. That was true at the relevant time
in relation to the agreement in this case, and

it was true until quite recently.

That was changed by statutory rule 112

of 1988 which came into effect on 1 June 1988

and that raised the amount in section 70(l)(a)

from $500,000 to $2 million, but that was not

in operation at the relevant time so far as

this matter is concerned. Your Honours,

section 70(1)(a) began life in a slightly

different form as section 20(2) of the

AUSTRALIAN BROADCASTING ACT of 1942, and I think

Your Honours have these materials.

MASON CJ:	Yes, they are in the folder, are they not?
MR SEXTON:	Yes, they are, Your Honour.
MASON CJ:	Thank you.

C2Tl/2/HS 2 15/9/88

MR SEXTON (continuing): That particular page is number 6

of the small envelopes with the page numbers in

red at the bottom right-hand corner. Your Honours

will see there section 20(2) which states that:

The Cormnission shall not, without the

approval of the Minister -

(a) acquire any property, the cost of

acquisition of which exceeds the sum of

Five thousand pounds -

and then goes on to talk about leases. That was

in Division 2 of that particular Act, with its

heading "Powers and Functions of the Commission".

In 1956 by Act No 33 in a rearrangement

of the legislation, by then the BROADCASTING

AND TELEVISION ACT, that section became, in

a slightly different form, section 62, and that

is page 2 in these volumes. That section provided

that:

Notwithstanding anything contained in

this Act, the Commission shall not be

empowered to enter into any agreement

involving any expenditure by the Commission

in excess of Twenty thousand pounds, or

extending over a period of more than

five years, unless the approval of the

Minister thereto has first been obtained.

The next development in the legislative

history took place in 1980, and this is page 4

of those in the binders, Your Honours, by

Act No-143 of 1980 where section 62 was repealed

by section 12 of that Act. Section 70 and

section 70A and B were inserted. Your Honours

will see on the second page in the envelope

marked "4", section 70B, with the heading "Limitation on contracts", provides that: (Continued on page 4)

C2T2/l/JM 3 15/9/88

MR SEXTON (continuing):

The Commission shall not, without the

approval of the Minister, enter into a

contract involving the payment or receipt

of an amount exceeding $250,000 or, if a

higher amount is prescribed, that higher

amount.

That is in very similar terms to the present

section.

That section 70B remained in Division 3 of the BROADCASTING AND TELEVISION ACT which was headed "Powers and Functions of the Commission",

being the Australian Broadcasting Commission.

In his judgment in the Court of Appeal,

Mr Justice McHugh assumed with some good reason

that the current section in the AUSTRALIAN

BROADCASTING CORPORATION ACT was, when that Act
was passed in 1983, that that was the occasion

on which the heading "Finance" was inserted over

the sections containing this particular clause.

In fact, it seems that what occurred was that when the BROADCASTING AND TELEVISION ACT was reprinted in 1982 a new division or a heading

"Division 4 - Finances of the Commission" was
inserted into the reprint even though it had
not been part of Act No 143 of 1980 and if

Your Honours look at page 5 in the volume

Your Honours will see that in the reprints of

1982 there is a heading "Division 4 - Finances of the Commission" and that was inserted after

section 67 and section 70B therefore found itself

under that heading for the first time.

There were no further changes then until

the passage of the AUSTRALIAN BROADCASTING CORPORATION

ACT in 1983 when the former section 70B was

translated into its current version and in that

part of the Act which was headed "Finance". (Continued on page 5)

C2T3/l/ND 4 15/9/88

MR SEXTON (continuing): That, Your Honours, is the history of

this section and it was in the judgment of

His Honour Mr Justice McHugh that con~iderable weight

was given to the location within the AUSTRALIAN BROADCASTING

CORPORATION ACT of this section, and His Honour took

the view that, on balance, the location of this

section in the context of other sections of the Act

meant that it was not the intention of the legislature

that the entry into a contract without ministerial

approval would be beyond the powers of the Cormnission.

It is the appellant's submission, Your Honours, that

that finding was in error and those submissions are

made for a number of reasons.

The first of those, in our submission, is that

His Honour did not give sufficient weight to the words

of the section themselves, which contain the prescription

that:

The Corporation shall not, without the approval

of the Minister -

enter into a contract -

of the kind in question and, in our submission, those

words would require a clear demonstration from the

remainder of the statute that it was not the intention

of the Parliament to render such a contract ultra vires

before that conclusion should be reached. So the

starting point, in our submission, Your Honours, is the

words of the section. The second ground to which the

appellant points, is the second paragraph - that is

paragraph (b) of section 70(1). That provides that:

The Corporation shall not, without the approval

of the Minister -
(b) enter into a contract or arrangement with
another person under which the other person

agrees to acquire real or personal property to

be leased, or let on hire, to the Corporation. That, in our submission, renders beyond power a specific

contract, a particular kind of contract and, therefore,

lends weight to the view that this particular section is

not one that is to be treated as allowing the entry into

contracts about which it speaks.

DEANE J:	Now, while you are dealing with history, do you know
offhand when 69(2) first came in? (Continued on page 6)

C2T4/l/VH	5	15/9/88
MR SEXTON:	I cannot answer that question.	I do not think

from the - unless -

DEANE J:	Do not trouble now.	I notice it has been there
for a while.

MR SEXTON:	In our submission, subsection (l)(b) lends weight to the view that the section was designed
to put beyond power a general class of contracts
and also a specific kind of contract. That is
reflected also in our submission in the subheading,
"Liunitation on contracts and lease-back arrangements"
which, we would say, indicates again the parliamentary
intention that the contracts referred to in the
section should be beyond power unless the conditions
that the section prescribes have been met.
BRENNAN J:	What do you mean by "beyond power"?
MR SEXTON:	Beyond power, Your Honour, in the sense that

if the contract is concluded --if it would otherwise

be concluded in the case of, for example, a private

individual or a corporation - it is of no effect
in the case of the statutory C-Orporation because

the statute places a limitation on its power

to enter that contract.

BRENNAN J:  But the· limitation is on entry into; prohibition

is against entry into?

MR SEXTON:	Yes, Your Honour, in our :submission.
BRENNAN J:	Which rather suggests that there is power to enter into but it is not to be exercised.
MR SEXTON:	We would say, Your Honour, that the effect

of the section is to render nugatory any attempt

to enter such a contract; that that is the

limitation that is imposed by the statute. That,

in other words, the Corporation does not, under

this Act, have the power to do certain things

and if it attempts to do such a thing that it	is simply unable to do so as a matter of its
own legal powers.

BRENNAN J: It is not a case of unlawfulness?

MR SEXTON: It is difficult to distinguish it, perhaps,

from some of the cases on statutory illegality

which, in the case of, perhaps, an individual
who was in contravention of a section, it would

be perhaps also unlawful. In our submission

it would, in this case, simply be beyond power

but the event, as it were, would not take place

so there would not be any element of illegality.

C2TS /1 /SDL 6 15/9/88

MR SEX10N (continuing): There was reference in His Honour

Mr Justice McHugh's judgment to the second

reading speech of the minister to which

reference was made in the Court of Appeal and

that speech is at page 9 in the volume that

Your Honours have. It is a reference to the

speech of the Minister for Cormnunications on

4 May 1983 moving that the Australian Broadcasting

Corporation Bill be read for a second time and, at

the bottom of page 189 which is the third page in

that material, Your Honours will see a reference

to Part VI of the legislation which is the relevant

part headeC: ''F:inance" and the minister says that that

part of the Bill:

Contains the financial provisions applying

to the Corporation. These are similar to

those applying to the Australian Broadcasting

Cormnission except that the ceiling on contracts

for which ministerial approval is required has

been lifted from $250,000 to $500,000.

And the minister then goes on to say:

There is also an express provision preventing

the ABC from entering into any leaseback

agreements unless the approval of the

Minister has been obtained.

In our submission, Your Honours, this would be a

use of this particular extrinsic material to confirm

what is the plain meaning of the statute rather than

to elucidate an ambiguity. In our submission,the
section is not ambiguous on its face and what this
extrinsic material does is to confirm the view that

the ABC is prevented by this section from entering

into the agreement in question and we draw particular

attention to the sentence that occurs on the top of

page 190:  -

There is also

which is a reference to the limitation in

section 70(1)(a) -

There is also an express provision preventing

the ABC from entering into -

the specific kind of contract referred to in

subsection (l)(b). So that, in our submission,

that legislative intention is reflected in the

speech of the minister on the second reading of

the bill.

In relation to the legislative intention - - -

C2T6/l/SH 7 15/9/88

DEANE J:	When you say it is not ambiguous, can the Corporation enter into a conditional contract,
making it a condition that the approval of the
minister be obtained?
MR SEXTON:	In our submission, Your Honour, there could

be no contract to, as it were, obtain the

minister's permission.

DEANE J:	So the answer is 11 No 11 ?
MR SEXTON:	I think the answer is "No", Your Honour.

We would say that there is no contract until

the minister's approval is obtained. It could, of course, in every other respect, be ready but

we say that there could be no contract until

that approval is obtained.

DEANE J: It must be the prior approval. You get that

from the "enter into".

MR SEXTON:  Yes, Your Honour. In relation to the legislative

intention, in addition to those specific statutory

materials and the extrinsic materials, we would

say that the section demonstrates an intention
on the part of the Parliament to make the financial
affairs of the Corporation to some degree accountable

to the executive in the form of the minister

who is responsible for the Corporation and that

if the section is not given its plain meaning

that that accountability is effectively lost.

His Honour Mr Justice McHugh referred to

section 8 of the AUSTRALIAN BROADCASTING CORPORATION

ACT which sets out the duties of the board and

one of those duties being to see that the Act

is observed. In our submission, that does not,

however, provide any real degree of accountability

and it is possible to envisage a situation where,

for example, film rights were purchased for a

period of 5 or 10 years into the future for

substantial sums of money and without ministerial

approval being obtained.

If that contract were held to be operative,

then even if the absence of approval were discovered

more or less immediately, there would be an obligation

on the part of the Corporation to continue those

payments over whatever period was prescribed

into the future despite the absence of the ministerial

approval and, in our submission, section 8 would

not therefore deal with the situation that we

say section 70 is attempting to deal with.

C2T7/l/ND 8 15/9/88

MR SEX'IDN·(continuing):  As Your Honours are no doubt aware, the headings

of legislation are considered part of the

legislation and are available for consideration

in relation to its construction, as His Honour

Mr Justice McHugh did bu½ in our submission, the

headings cannot be used to cut across the plain

meaning of a section although each statute

is very much construed in terms of its own

language. We would refer Your Honours to the

comments that were made by Lord Goddard in

REX V SURREY (NORTH-EASTERN AREA) ASSESSMENT

COMMITTEE EX PARTE SURREY COUNTY VALUATION

COMMITTEE. I am not sure that Your Honours

have copies of that - I think perhaps Your Honours

do have copies of that case. That is reported

at page 32 and page 33 - the very bottom of page 32,

at (1948) 1 KB 28, and the comments of

about point 9 where Lord Goddard, in discussing

this questionr says that:

while the court is entitled to look
at the headings in an Act of

Parliament to resolve any doubt they

may have as to ambiguous words, the

law is quite clear that you cannot

use such headings to give a different

effect to clear words in the section

where there cannot be any doubt as to

their ordinary meaning.

So there are, as Your Honours will be aware,

other authorities to that same general effect.

GAUDRON J:	Mr Sexton, does not doubt arise by reason of the words of section 25 where the powers given
in general terms are made subject only to the section?

MR SEXTON:  Your Honour, in our submission, section 25

sets out a range of specific powers for the

Corporation, but it does not, in section 25,

say anything that would be sufficient to remove

the plain meaning of section 70, that section 25

is, in part, a granting of powers and in some

part also a limitation on those powers. That

there is in other parts of the legislation, or

at least in one other part of the legislation

another limitation on powers is not, in our submission, fundamentally inconsistent with

section 25 and not such as to raise a real

ambiguity, in the sense that the arrangement

of the statute is essentially a matter of the

draftsman's administrative inclinations

C2T8/l/HS 9 15/9/88

and while, in a genuine case of ambiguity,

those headings may be useful, location may be

useful to resolve a real doubt, that the words

of section 70, on their face, do not raise that

doubt and, indeed, that the heading"Finance ,"
even, would not necessarily answer such a doubt.

It does not itself cut across the concept of section 70 being a limitation on contracting

powers simply because it happens to be located

in that particular part of the Act. In our

submission, all the sections of the Act should

be given their plain meaning, unless there is some

very obvious reason why that cannot or should not

be done, and if two sections were glaringly

inconsistent with each other, that would, we

would concede, be such a reason, but we would

say that is not the case here.

DEANE J:	What about section 69(2)?
MR SEXTON:	The estimates section, Your Honour?
DEANE J:	Yes.  Does that limit power, and could a third

party ever see the estimates?

MR SEXTON:  Not only, perhaps, the third parties,

Your Honour. In our submission, it may well be a limitation on power, but not one that we

would say is likely to have any practical effect.

The estimates of the Corporation in relation to figures for expenditure 0 on a year-by-year

'basis would only presumably mean that if a contract,

for example, exceeded the expenditures that were
available for a given period of time, that it

would fall outside that provision.

(Continued on page 11)

C2T8/2/HS 10 15/9/88

DEANE J: Well, no, presume that there were detailed estimates

which contained no provision at all for expenditure

of money in relation to leasing of premises in Sydney,

which means that the contract would provide for

expenditure of money otherwise in accordance with the estimates, would section 69(2) take that beyond power?

MR SEXTON:  In our submission, it would, if that were the form

of the estimates; if that were what the section meant.

In our submission, however, the section is a reference to

quantities rather than to qualities of expenditure.

It talks about estimates of expenditure and, in our submission, that refers to the global sums and

therefore it is unlikely that there could be a

practical contravention of that section. But,

this example Your Honour gives and if the section were
to be given that meaning, its language would again

be clear on its face.

DEANE J: Or, what if the Corporation spent all its money by

January and the contract was entered into in February, has the landlord got to go into the Corporation's finances before he knows or does it have a contract?

MR SEXTON: Well, in those circumstances, again, as a practical

matter, it may be that until the next inflow of funds section 70 of the AUSTRALIAN BROADCASTING CORPORATION
there simply - it is not possible to have any payments.

ACT. Unless Your Honours have any matters relating

to those sections, I was proposing to move on to the

submissions relating to the LANDS ACQUISITION ACT.

BRENNAN J:  If you are unsuccessful on the question of power

under section 70, do you raise illegality or not?

MR SEXTON:  In our submission, they amount to the same thing in

this case, Your Honour; that if the entry into the

contract - we would say it is beyond power - but one of

the reasons it is beyond power is that it is a

contravention of the relevant provision on the part

of the Corporation to enter into that particular

contract and it could be equally, perhaps, argued as

a case of statutory illegality except that, in our
submission, if the Corporation is in contravention of

an enabling provision of its own statute, then it is,

in effect, outside its powers and therefore no contract

can be concluded.

BRENNAN J: Well, so you say, but that has to come to grips with

the observation of Justice McHugh, does it not, that

statutes which create illegality are not necessarily

construed as depriving the party to whom they are

directed of power.

MR SEXTON:  Yes.

C2T9/l/VH 11 15/9/88

BRENNAN J:  And I wonder whether you have a fall-back position

or whether you do not, because if you do not, well,

we do not have to consider - - -

MR SEXTON: Well, Your Honour, if it were a contract between

private individuals that was arguably prohibited by

a statute we would say that there would then be a

question as to whether that prohibition - one can

phrase the question in two ways - whether the statute

prohibits the contract and, if the answer is yes,

then that is the end of the matter. But another way

of phrasing the question is whether the statute is

intended to render the contract void or unenforceable

if it is in contravention of the statute. In our

submission, both those questions are only two ways of

asking the same one and if the answer is yes, no

contract comes into effect.

The argument was put on that basis, amongst others,

in the Court of Appeal, and we would rely on it also

here, although, in our submission, because it is the

Corporation and it is its own statute, that it would

be beyond power and that that is, in our submission,

really the same inquiry.

BRENNAN J:  Mr Sexton, is there any sanction for disobedience

to the injunctions contained in the section?

MR SEXTON:  Only the - therewa.s no sanction, Your Honour. I mentioned, His Honour Mr Justice McHugh referred As

to section 8 which sets out the duties of the board of the Corporation and enjoins them to see that the provisionsof the legislation are observed, but it

does not then provide what will happen if the provisions

of the legislation are not observed or, indeed, if the

board makes no efforts to see that they are observed.

(Continued on page 13)

C2T9/2/VH 12 15/9/88

BRENNAN J: Subsection (3) denies that any of the duties

are enforceable by a proceedings in court.

MR SEXTON:	Yes, it does, Your Honour.
BRENNAN J:	So that the answer to the question is that

there is no way in which the sanction is provided

by the Act for any contravention of the section?

MR SEXTON:  Yes, Your Honour.

BRENNAN J: Is that your proposition?

MR SEXTON:  Yes, Your Honour. In relation to the

LANDS ACQUISITION ACT and section 54A of the

New South Wales CONVEYANCING ACT, which is

the second argument that is referred to in

the submissions, Your Honours. It was accepted

by Mr Justice McHugh and Mr Justice Samuels

in the Court of Appeal that the ABC, like other

federal statutory corporations,was required to

observe certain provisions of the LANDS ACQUISITION

ACT when acquiring land. I thin1~ Your Honours

have copies of the LANDS ACQUISITION ACT, which

is at number 7 in the volume, Your Hvnours.

Your Honours will see that in 66A(l)

it provides that:

except as otherwise approved by the

Minister, the acquisition ..... of land required for the purposes of -

(a) a corporation incorporated by a law

of the Commonwealth

which we says is the Australian Broadcasing Corporation -

shall be effected under this Act.

The provisions that need to be observed, in our

which require the the authorization of the minister	submission, are found in section 7 of the Act,
in subsection (1) and in subsection (3), the laying before the Houses of Parliament of the details of
that acquisition. It is common ground, I think,
in this case, that those requirements were not
met. The minister in this case is not the Minister
for Communications, but another minister, the
minister responsible for the LANDS ACQUISITION ACT and the minister at the time was the Minister for
Local Government and Administrative Services.

Section 66A(3) then applies a savings clause

to acquisitions that have been carried out by a

statutory b·ody but not in accordance with the

provisions of the LANDS ACQUISITION ACT. Subsection (3)

says that:~

C2Tl0/l/JM 13 15/9/88

Without prejudice to the obligation of -

those statutory corporations -

not to acquire land otherwise than in

accordance with -

section 66A, that -

section shall not be taken ta invalidate

an acquisition of land otherwise than in

accordance with -

section 66A. So it is considered by the appellant

that in normal circumstances, so far as the

LANDS ACQUISITION ACT itself is concerned, that

subsection (3) would cure the defect of a

contract that had been entered into without

compliance with the relevant provisions in

section 7 of the Act. But, in our submission,

there is an additional factor in this case, which
is the operation of section 54A of the New South

Wales CONVEYANCING ACT, which is found at page 8 of the binders, Your Honours.

(Continued on page 15)

C2Tl0/l/JM 14 15/9/88

MR SEXTON· (continuing): That, in subsection (1) provides

that, effectively:

No action or proceedings may be brought

upon any contract for the sale or other

disposition of land -

without a memorandum in writing -

and signed by the party to be charged or

by some other person thereunto by him lawfully

authorised.

There was a memorandum which was quite specific

in its terms in the form of a letter in this

case, and that I think is common ground, but

in our submission it could not be, in these

circumstances, signed by a person lawfully authorized.

GAUDRON J:  Does the CONVEYANCING ACT purport to bind

Commonwealth instrumentalities?

MR SEXTON:  In our submission it would bind the - - -

GAUDRON J: · Does it say anything at the beginning of the

Act as to who is bound by it?

MR SEXTON:	I think it is silent, Your Honour.
GAUDRON J:	It does not purport to bind the Crown in any

respect?

MR SEXTON:	I am looking for the - if there is any reference to its -
MASON CJ:	We hope it does not because we may find ourselves
embarking on a constitutional argument.
MR SEXTON:	I was going to make the submission, Your Honours,

that the Australian Broadcasting Corporation

would not be the Crown in the right of the Commonwealth

and that, therefore, the question would not be

a constitutional one.

MASON CJ: Is there any decision on the question of whether

the Australian Broadcasting Commission is the

Crown?

MR SEXTON:	I am instructed that the decision of the Full Federal Court in a case involving the COPYRIGHT
ACT was to the effect that it was not the Crown
in right of the Commonwealth.  I will see if
that can be checked. There does not appear to be in the CONVEYANCING ACT any reference to the
Crown in the right of the State or the Commonwealth.

C2Tll/l/SDL 15 15/9/88

On that basis, Your Honours, we make the

submission that the document that was signed
in this case, which was signed by an officer

of the Department of Local Government and

Administrative Services, but in the absence of

compliance with the relevant provisions of the

LANDS ACQUISITION ACT that was not a signing

that was lawfully authorized and that while

section 66A(3) would cure a defect that arose

solely out of that legislation - - -

MASON CJ: This is a very grubby point for a statutory

authority to take, is it not, Mr Sexton?

MR SEXTON:	Your Honour, it is a point that arises out of the statutes.
DAWSON J:	Was it pleaded as a defence, do you know?

MR SEXTON: It was argued in the Court of Appeal, Your Honour.

There were no pleadings in the matter at first instance; it was by summons.

DAWSON J: Well, it was taken?

MR SEXTON; Yes, Your Honour. Your Honour, that is our

submission;	I think Your Honours understand
that submission and	the primary submission relates

to the section of the Corporation's own Act and

that is the submission on which we rely.

(Continued on page 17)

C2Tll/2/SDL 16 15/9/88

BRENNAN J:  Mr Sexton, if we are not concerned here anywhere

with legality but only with the question of

power, why should the Corporation be heard to
deny its own power in order to avoid a liability

which its de facto appointed officers incurred?

MR SEXTON: Well, Your Honour, we would say that estoppel

cannot operate against the statute; that the powers

that are provided by the statute are all that the

Corporation has and that there is authority on

that question of estoppel and statutory bodies.

BRENNAN J: Well, then, if you fail on the question of power

and do not rely upon illegality, is there any

reason why then you should be allowed to raise

the defence?

MR SEXTON: In relation to illegality, Your Honour?

BRENNAN J: Yes. If you choose not to rely upon it.

MR SEXTON:  We would say - well, I do not think that I took

that option, Your Honour.

BRENNAN J:  I see, yes. You are leaving it open.

MR SEXTON:  If I can put it in the sense that if Your Honour

distinguishes between those two concepts, we would

rely upon it with the same effect that the statute

provides either for contravention or for not and
for consequences of it and we would submit that

the consequences are that the statute is of no

effect or, alternatively, is unenforceable but,

in either event, we would say it is a consequence
of the statute and it is not something on which

the ABC either relies or does not rely; that it is

something that happens by operation of the statute.

DEANE J:	You were the defendant at first instance, were you
not?
MR SEXTON: Yes, Your Honour. Unless I can further assist

Your Honours, those are the submissions on behalf

of the appellant.

MASON CJ: Yes, thank you, Mr Sexton. Yes, Mr Walker.

MR WALKER:  May it please, Your Honours, I hand up the outline of submissions.

MASON CJ: Yes, Mr Walker.

MR WALKER:  May it please, Your Honours. Your Honours,might

I remind you of the facts that bring this apparently dry point of statutory interpretation before

Your Honours. The parties before you became, by

C2Tl2/l/SH 17 SEXTON 15/9/88

devolution of title, parties to a lease of

commercial premises used by the ABC avowedly

and as a matter of common ground for proper

purposes of the ABC.

The lease contained a provision which

provided for review of rent triggered by a

demand by the landlord which was to be answered

by a request for arbitration, a valuation, in the

event that the new level of rent was disagreed

with by the ABC. My client's position was that

that was duly done but the ABC failed in the time

stipulated by the lease to request valuation.

The ABC, in due course, came to dispute that that
was the true description of what had happened.

The parties were in dispute. There was, meantime,

the question of whether an option for renewal

ought to be exercised. We now know but my

client did not at the time that the ABC was in

the course of reorganizing its use of commercial

premises. Mr Justice Bryson refers to another

arm of the ABC working in that direction while

the Department of Local Government and Administrative Services was attending to this matter between the ABC

and Redmore.

(Continued on page 19)

C2Tl2/2/SH 18 15/9/88

MR WALKER (continuing): What happened was, in the letter

to which my learned friend has referred, the dispute about the raising of the rent to the

level sought by the landlord and the question

of extending the term for a period less than
that granted by the option to renew but obviously
of a period desired by both parties as a matter

of compromise was agreed upon and it was agreed

upon in a form which stipulated all matters which

would satisfy in the statute of frauds in complete

precision including the perhaps unusual phrase

that the letter which was to be signed by the

officer was to be binding on the parties who

were thereafter to enter into a formal lease

in a form stipulated in great detail.

The solicitors for my client continued to

press for some months for the memorandum of lease
which was this first executory obligation under
the agreement between the parties to be executed.

In my submission, on the facts summarized by

Mr Justice Bryson, it can be seen that the ABC

put this question off without, for several months,

actually repudiating the agreement. Far from

it, the ABC paid rent which can be seen to have
been calculated only upon the basis of the

compromise reached and reached only in the letter

of agreement. ·

Some months later, we now know at a time

when the plans for reorganization of premises

had been completed and decisions had been made

to move from these premises, the ABC eventually,

in answer to a series of telexes which went to

higher and higher officers in the Corporation

but went unanswered, eventually repudiated the

agreement leading to the summons which my client

issued consequent upon its acceptance of that

repudiation.

It can be seen therefore that if the ABC

is successful in relying upon what might be called

its own illegality, and which in plain terms

is its own breach of a prohibition placed upon

it, then the ABC's interest~ at least those narrow

interest concerned with this particular transaction

and its reorganization of premises, will have

been served by its own wrong. In my submission,

that is a consequence of the interpretation of

the Act urged by my friend which ought to give

the Court pause.

The case, as a matter of statutory interpretation,

1s not about what the plain words say and here

we respectfully differ from how my learned friend

started the submissions on the meaning of the

Act. The words of sectin 70 do not say what

C2Tl3/l/ND 19 15/9/88

the consequences of breach will be. What the

words of section 70 do say is, in my submission,

notable for several features. The first is that
the prohibition is directed to the ABC. It is
not directed to parties dealing with the ABC

and yet section 70 implicitly recognizes that

there will be other parties because it talks

of contracts. It is not a prohibition on persons

entering contracts with the ABC unless the minister

has approved it. It is a prohibition on the

ABC entering such contracts.

If the interpretation urged by my friend

as to the consequences of breach were to be accepted

then, for practical purposes, there would be

no difference between a provision which prohibits

the ABC and is not directed to the other contracting

party and a provision which embraced both parties

to the contract. The question of so-called mandatory

or directory is the one which has dominated argument

in the courts below on this case. We respectfully

agree with my learned friend that it might as
well be cast - or could as well be cast in terms

of illegality and the effect of illegality.

This is not a case where the question which

may or may not still be vexed of substantial

compliance and the role of such a doctrine has anything to do with the issue. There has been

a total lack of compliance in this case. However,

in my submission, the law is plain and we do

not understand it to be challenged that the

so-called mandatory directory distinction, at

least when one talks about the consequences in

the manner that the High Court referred to in

CLAYTON V HEFFRON, is a matter which is a live

one notwithstanding total lack of compliance.

(Continued on page 21)

C2Tl3/2/ND 15/9/88

MR WALKER (continuing):  The question always is what is the

be more mandatory than

consequence not explicitly provided for of because nothing could

the breach of a provision of a statute?

the words of~ provision such as section 70, literally

prohibitory, but we accept that these are not

words which one may or may not choose to comply

with. They are compulsory.

The question simply is what happens to

transactions which were entered into as a

result of its breach. Your Honours, it has

been put against us in my learned friend's written

submissions that His Honour Mr Justice McHugh

below did not place enough or any emphasis on

the heading of this section, section 70.	We
make two observations on that.	The first is

that section 13(2) of the ACTS INTERPRETATION ACT

means that that heading is no part of the Act

in any event, unlike the heading of the parts. Secondly, that heading is itself delightfully

ambiguous. It simply says "limitations on contracts".

The limitations, clearly, could be a word which

refers either to monetary limit, which would be

its natural meaning, when one looks at the content

of the section, or it may be a reference to a power, according to my friend's argument. No

doubt for that reason of perhaps lack of

precision the heading is not part of the Act.

Similarly the second reading speech to which

my learned friend turns has nothing to add, in
my respectful submission, either to a

reinforcement of so-called "plain words

interpretation", or indeed to the elucidation

of an ambiguity. We, of course, say this is not

a question of a plain words problem or an ambiguity

problem. It is the age old difficulty for

the Court of determining what is the consequence

for a transaction when a provision is breached,

and simply that; but the second reading speech	simply talks about ceilings on contracts, clearly
a monetary limit again. The minister does not
address himself to the question of what happens if the ceiling is forced through and what happens if the provision is breached.

However, the second reading speech does

perhaps contain other pointers in the direction

which, I would urge Your Honours, favours this

appeal being dismissed. My learned friend,

Your Honours will recall, took issue with what

Mr Justice McHugh said concerning the placement,

as it happens, of section 70 in the finance

provision rather than the powers provision.

It was said that this was over-emphasized and

C2Tl4/l/HS 21 15/9/88

that if there is a limitation on a power

it may as well be found anywhere in the Act,

as in the section precisely headed Powers.

DEANE J:  Mr Walker, in this particular case, what if there

had been proceedings for specific performance

of the agreement to execute the lease? What

would you say was the operation of section 70

there?

MR WALKER:  Your Honour, the answer perhaps lies - my

answer is illustrated by the form the proceedings

did take. There would clearly be more doubt

attendant upon the seeking of a discretionary

remedy than there is upon a remedy at law.

We sue at law - - -

DEANE J:  Forget the discretionary remedy. Let us assume

that the minister, as it were, came down and

said, "You cannot enter into a contract for more

than $500,000 without my approval and I don't

approve". Would the ABC none the less be entitled

to go ahead and perform this agreement and

execute the lease providing for payment of more

than $500,000?

MR WALKER:  Your Honour is asking me about the ABC's

position in a specific performance suit brought

by the other party?

DEANE J:	Yes.
MR WALKER:	Your Honour, I am sorry if my answer appears

to transgress your direction that I forget about
the discretionary aspects of the remedy but,

in my submission, that is where the answer lies.

The Court would perceive two things. The first

is that there would be a breach of prohibition -

whether one uses the emotional language of
illegality or unlawfulness would not add to it -

and that would very properly be brought into the

scale on the question of discretionary remedy,

·particularly if the ABC repented, as it were,

and said that, "We now ask the Court not to force
us to do that which we now appreciate to have

been wrong".

(Continued on page 22)

C2Tl4/2/HS 22 15/9/88

DEANE J:	But assume you had a very moralistic, strong-minded judge, who said, "If the ABC can lawfully perform
this agreement, I will order them to do so."
MR WALKER:	Yes.
DEANE J:	"And you can talk till you are blue in the face about discretion, but if it can lawfully do it, I
will order them to do it." That would bring you
to the question whether the ABC could lawfully
do what it had promised to do."
MR WALKER:	And my answer to Your Honour is yes, the judge could order that and, yes, the ABC would be bound
not merely as a litigant but would be capable as
a Corporation of complying with that order, and that comes back to the question of powers which is the central one in this case and ultimately - and
never does leave section 25.
DEANE J:	Or does it come to lawfulness in that if there is
a statutory prohibition on the performance of this
contract which involves entering into a supplementary
agreement, does that, as it were, affect the question
as to whether the agreement itself is a nullity or
valid and enforceable?

MR WALKER: Ultimately not, Your Honour. Ultimately, we say

there is power to do that which is prohibited and

we hope that that is not an absurdity and, in my

submission, on the authorities it has not been

treated as self-evidently an absurdity in all cases.

DEANE J:	I think I have stated it a bit highly against you
for the sake of argument.  I am right, am I not,
that if a new lease had been entered into, the payments
under it would have been less than $500,000?
MR WALKER:	I am sorry, Your Honour, I - - -

DEANE J: Well, do not trouble, as I read it - - -

(Continued on page 24)

C2T9/l/VH 23 15/9/88

MR WALKER:	I can give Your Honour an answer to that question.
DEANE J:	As I read it, you needed to go to other
considerations to get the payment over
500,000.
MR WALKER:	Your Honours may recall that I argued and

failed to persuade every judge below that

this was not a contract which required
more than 500,000 to be spent because, in fact,
it was a wash-up, compromise agreement to
pay arrears claimed which, on any basis,were

owing and also, some extra rent. That was

rejected for reasons which we no longer contest.

I am sorry I cannot answer Your Honour's question

on the facts, but I think it is the case that

had the option simply been exercised, there would

be no dispute before Your Honours.

DAWSON J: While you are being interrupted, Mr Walker,

· you keep talking about a prohibition upon

entering into the contract; that is one way of

looking at it~ But cannot you say that there

is power to enter into a contract; that is given

by section 25 and what section 70 is about is

the way in which you go about entering certain

contracts?

MR WALKER:  Yes.

DAWSON J: But you never really get to the question of

power in that sense.

MR WALKER: Exactly, Your Honour, and that is our case.

DAWSON J:  I thought you were putting the point a little

differently.

MR WALKER:  I am sorry if I have confused it. Section 25,

we say, is the be-all and end-all of power in	this case. It is found in that provision and	is not taken away by section 70. Section 70 is
a procedure laid down -for the ABC, and not for
the other party, to ensure that the ABC brings
under executive scrutiny what Mr Justice Kirby
called "large contracts".

DAWSON J: It could have been worded: "Before entering

into a contract for more than 500,000 the

Corporation shall seek the approval of the

minister." That is what it means.

MR WALKER:	Yes, Your Honour. And, Your Honour, perhaps at that point, if I could pick up on something
that my learned friend drew to the Court's
attention in what he called the history of
this provision, but we would prefer to call the

C2Tl6/l/JM 24 15/9/88

pre-history because these other statutory

precursors of this section ought to be seen as

similar provisions in other Acts and at other

times designed to achieve perhaps other ends.

I hope this links up with what is said in the

second reading speech to which I was about

to refer Your Honours.

(Continued on page 26)

C2T16/2/JM 25 15/9/88

MR WALKER· (continuing):  Under the 1942 version, which my friend

first took Your Honours to, there appeared, following

section 20 to which my learned friend referred

Your Honours, section 21, which has been very

deliberately expressed in terms of power:

Notwithstanding anything contained in this

Act, the Commission shall not be empowered

to enter into any agreement involving any

expenditure -

et cetera. If anything, the pre-history of this

section strengthens our argument that words have

been chosen which deliberately, or at least in their result, do not affect questions of power

and were not intended to. Similarly, that was

repeated in section 62 of the next version of

the Act to which my learned friend took Your Honours
and the provisions then began to take the more

modern form that Your Honours have before you

today.

While on that question of the history,

Your Honour Justice Deane asked my learned friend

about the history of the present section 69(2).

I cannot answer Your Honour comprehensively but

I note in the material supplied by my learned friend that there was a version, I think with

only one word changed, the word "the" inserted

in the new version, of that in section 70A(2)

of what I will call the 1973 reprint - the Act

before the 1980 amendments - the BROADCASTING

AND TELEVISION ACT. That read:

The moneys of the Commission shall not be

expended otherwise than in accordance with

estimates of expenditure approved by the
Minister.

That has now been changed to refer to "the estimates" because there is now an obligation to prepare

them. In the second reading speech on this question

of where description of powers and limitations

of powers are found in the Act, the minister

said, at the foot of the right-hand column on

page 187 of the extract supplied, that:

The provisions in the BROADCASTING

AND TELEVISION ACT 1942 covering the ABC

were drafted many years ago and are now

largely outmoded. This Bill modernises

the legislative base for the ABC. An important

innovation is to establish the ABC under

its own Act of Parliament -

we would interpolate a fresh start is envisaged,

a~d then, finally:

C2Tl7/l/SDL 26 15/9/88

This will help make the ABC's legislation

more accessible to the public at large.

In my submission there is a reason why the ACTS

INTERPREATATI0N ACT, section 13, says that headings

to Parts are parts of an Act because they are a guide to the ordinary reader of the statute and, as a guide to the ordinary reader of the statute, the heading, "Powers" and then the apparently

comprehensive words of section 25, with grants,

denials and express limits, is a powerful reason

to give some meaning to the minister's hope that

this will be accessible to the public by not

acceding to the argument that one, in fact, has

to look elsewhere - in this case in the finance

provision, section 70 - to get the whole story

on the powers of the ABC.

BRENNAN J:  Mr Walker, accepting your submission as to

power, why do you say that section 70 is a direction

to the ABC as distinct from a direction to the

public at large? It is an injunction contained

in a public Act that the Corporation shall not

enter into a specified type of contract without

the approval of the minister. That is a provision

of the general law.

MR WALKER:  Yes.

BRENNAN J: That is as much directed to a person entering

into a contract with the ABC as it is to the

ABC itself, is it not?

MR WALKER: No, Your Honour, we contest that. If it were

to be directed to the other party to the contract

just as much as to the Corporation, nothing would

have been more natural or easy than for it to
be expressed as such:

No persons, including the Corporation, shall enter into contracts -

et cetera. It is a provision in compulsory terms
in a public Act.	In that sense, and for the

reasons tied up with the public importance of

the ABC and the public importance of integrity

of public funds and their expenditure, it is

something which is important to all citizens

and a 11 taxpayers. . We accept that.

(Continued on page 28)

C2T17/2/SDL 27 15/9/88

MR WALKER (continuing):  But it is not, with respect,

directed to persons other than the Corporation

or, to use another expression of the law, it

would not be natural to describe it as binding
persons other than the Corporation. It is a
public law which equally governs all throughout

Australia and in relation to all citizens but

that is something shared with all provisions

of all public legislation.

DAWSON J:  But it is a section telling the Corporation

what it has to do, not telling someone else what

they have to do.

MR WALKER:  Yes, it says, "the Corporation shall not",

it is not possible as a matter of ordinary English
or as a matter of legislative application to

say that that binds BHP. It does not bind, with

respect, BHP~ Subject, of course, to ultimate

success for my learned friend in the high water
mark of his argument, it could then be said to

bind BHP and all other persons in Australia in

the sense that it will affect them grievously

but it certainly is not as a matter of language

directed to them nor as a matter of statutory

injunction do their names either specifically

or generally appear as the party who is to be

prohibited by the provision.

BRENNAN J:  But if your argument be right, the ABC and

BHP might with mutual knowledge of the lack of

ministerial approval enter into a contract involving

expenditure of say $1 million and on ABC being

constrained not to perform it, the ABC would

be liable in damages.

MR WALKER:  Yes, Your Honour, that must follow from the

argument that we put.

BRENNAN J:  How would you distinguish the provisions of

section 71A in the cases which deal with injunctions

a licence and the reason why I put that to you	to persons not to buy or sell products without
because there are some passages in a case of
CHAI SAU YIN, (1962) AC 304, which may bear upon
the subject?

MR WALKER:  I am obliged, Your Honour. I had not looked

at that reference.

BRENNAN J: Let me put to you the proposition so that

you can deal with it. -That was a case where

there was an injunction against persons purchasing

rubber unless duly licensed. Rubber was sold

and the purchaser did not have a licence. The

question then was whether the seller could recover

the price or the balance of the price. Held

that he could not.

C2T18/l/ND 28 15/9/88

MR WALKER:  Your Honour, the answer may lie in a flexibility

of interpretation of these provisions to fit

particular cases. That is not an easy submission

to put in light of authorities. There is no

authority that I am aware of that allows, as

it were, a court to pick or choose a mandatory
or directory interpretation according to particular

cases and Your Honour would not normally expect

a statute to vary according to particular cases

in its overall meaning but one of the virtues,

in my submission, of adopting an approach along

the lines of that which has been called "directory"

is that it would permit the Court to take into

account the relative importance in light of the

particular facts of the provision being observed

or not.

And it may be that the reasoning by which

the Court says that the breach of certain provisions
will not result in a consequence of nullification
is at bottom based as much as on anything else

as on the apparent injustice of nullifying a

transaction against an innocent as we would

submit Redmore was in this case and as many of

the cases are.

(Continued on page 30)

C2Tl8/2/ND 29 15/9/88

'MR WALKER (continuing): If that is a justification for

the principle, then if there is no innocent,

it may be that the principle is not applied

in the particular case and so the example

Your Honour gives me of both parties knowingly entering a contract which they know to be

contrary to the minister's wishes and without
the minister's approval, then in that case,

leaving entirely aside the overpowering

dscretionary factors there would be for any

equitable relief, even as a matter of law, it

may be that the statute would apply but,

Your Honours, I am conscious in putting this

submission that not only is it unsupported by

authority but it contains the obvious danger

that the interpretation of public Acts would be

subject to an ad hoc distinction of fundamental

principle.

However, in my submission, there is something

to be said for an argument which looks, in effect, for an aspect of innocence in the party which is

saying that nullification ought not to follow.

That would certainly fit more or less easily with

the decisions in this area although it has not been

an express factor in any of them. I do not think,

Your Honour, I can put a better answer than that.

Your Honours, the -

DEANE J: While you are being interrupted, can I take you

back to 69(2)?

'MR WALKER:  Yes, Your Honour.

DEANE J: Presume there was no money under the estimates

available for payment of the rent in this case.

Would you say that your client could obtain an

effective judgment against the ABC for the amount

of the rent?

'MR WALKER:  Yes, Your Honour, but I would have to try and

reconstruct a set of facts.

DEANE J: Well, I will just put this problem to you so you

can deal with it at the same time: on one approach

you can look at it as saying 69(2) is aimed at

ensuring that no money at all will go out of

ABC coffers come what may without the general

approval of the minister:.

'MR WALKER:  Yes.

DEANE J: Section 70 is aimed at ensuring that no obligation

to pay money over a specific amount out of the

coffers will be incurred without the approval of

the minister.

'MR WALKER:  Yes.

C2Tl9/l/SH 30 15/9/88

DEANE J:  Now, to that extent, they may well be related.

MR WALKER:  Yes. Your Honour, can I add a further provision

of the controls on the ABC in its expenditure of public funds for public purposes, commences by giving the Corporation a right to payment of

to that and go back to the beginning of this Part, part

appropriated sums. So, Parliament ultimately

decides the size of kitty which ABC spends

presumably in any one year.

Section 67(2) means, I suppose, on a literal

reading, that the Minister for Finance could strangle

the ABC from time to time or, at least, make life very

difficult for 11 months of the year because he may

give directions as to the amounts in which and the

times at which appropriated monies are to be paid

to the Corporation. Now, it is not to be supposed,

in my submission, that the control which is inherent,

indeed, explicit, in section 67(2) is something which

would affect the validity of a transaction which,
in its terms, requires to be paid for, shall we say,
in April notwithstanding that the Minister for

Finance has given a direction that the ABC will

get its next million dollars in May and that in

March most of the money already paid had been

spent.

It would be, in my submission, an extraordinary

result that one would not only have to look at

estimates for 69; one would not only have to quiz

public servants as to approvals, consents under

70; one would also have to know what the programme

for payment of appropriated sums1. is, laid down or

to be laid down by the Minister for Finance.

(Continued on page 32)

C2Tl9/2/SH 31 15/9/88

MR WALKER (continuing):  So that 67(2) is a provision which

certainly controls the amount of money available to

the ABC but which would not possibly, in my

submission, go to validity of transactions which

require to be paid at particular times. One then

goes to section 68 which talks about those moneys being the sums appropriated under 67(1) and doled out under 67(2). It, 68, might be seen as the

centre-piece of the financial control of the

Corporation before the event, as it were, the prescription

for what must be done and what must only be done with

the money, spent on proper purposes, in effect and,

in my submission, if one looks at, for example, the very

general provisions of (a), (b) and (c) of 68, they are so general

that they can only ref er back to, as their words, ih

fact require, functions and powers found elsewhere

in the Act.

Functions and powers found elsewhere in the Act

include, of course, very importantly section 25 and the very general functions laid down earlier in the

Act. It would be surprising if section 68 were to

be a provision capable of invalidating something

simply because - it would be very surprising if

section 68 were to be the source of any invalidating

effect and yet section 68 is the centre-piece which

delimits what the moneys of the Corporation may be
spent on.

One then comes to section 69, which Your Honour has asked me about, and it might be thought to be a

requirement for planning by the ABC as to its

expenditure. It must link back usefully to section

67(2) because, no doubt the two ministers would put

their heads together as to how the money should be

doled out so as to meet the estimates of expenditure

envisaged by the ABC which must be given to its

minister.

The estimates, in my submission, would have to

go beyond mere global sums, as put to you by my

learned friend.	The estimates, presumably, to be of
any meaning to the minister would have to say, so

much for television, so much for radio, so much for

salaries. That would obviously be important

information for a government with a role in fixing

wages and the like. In my submission, it would be

most extraordinary if, as my learned friend must

argue, the particular rubric and the way in which

any particular rubric is expressed, were then to

govern validity of expenditure on any particular

item.

To take an example, if, in January, the ABC

prepares an estimate, a word which is redolent

obviously of prediction rather than certainty, which

suggests that a certain amount of money will be

available for the purchase of real property, fee simple,

C2T20/l/VH 32 15/9/88

but during the year the particular land in question is the subject, say, to some doubt as to title, but the ABC is occupying it and wishes to lease for

the period during which, perhaps, the question of title

is being sorted out, it would be most deleterious

to the ABC and thus to the public interest if,

because such expenditure plainly fell outside the

estimates, it simply would not be within the

estimates, that the whole transaction of a sensible,

short-term lease would be struck down. So that

section 69 is seen as compulsory, without doubt:

The Board shall -

but it is something which need not have dire

consequences to be observed and I will return to

that in a more general submission about section 70

itself. The invalidation of everything which may

be said to have been done or to have been done only

because of a breach of section 69(2) would be a

most peculiar result of what one can easily envisage

would be the exigencies of the moment and the fact

that estimates turn out not to be 100 per

cent correct.

However, section 69(2) is framed in terms which

are just as prohibitory as section 70. The way

section 69(2) is framed, in my submission, is a clue,

and what ought to follow from it is a clue to how

section 70 ought then to be approached.

(Continued on page 34)

C2T20/2/VH 33 15/9/88

MR WALKER (continuing): Section 70 fits into the scheme

commenced by section 67. We have had 68 describing

a general integrity of expenditure; 69 requiring planning, no doubt in some detail, and requiring the ABC to stick to its plan; and 70 requiring

particular warning of particular forms of

transaction. In my submission, if it was intended

to deprive the Corporation of the power in the

sense that is picked up by my learned friend's

use of the expression "ultra vires" to enter

such contracts, it is odd that it is found in

a collection of injunctions and orders addressed

to the Corporation as to the propriety and

wisdom of its expenditure of money. One would

normally expect, as in the old Acts, that that

would be found as an express limitation in

section 25.

Construed in that manner, and merely pausing

for the moment at section 70, in my submission,

it ought properly be seen as wrapped up as part

of 67, 68, 69 and 70, and is obviously part of
the answerability of the ABC financially to the

executive.

DAWSON J:  Mr Walker, how does the question of illegality

arise?	I do not know that you have raised it,
but Justice Brennan did here.	I can understand

if you are contrated to do something which is

illegal, then that may affect its enforceability,

but is the illegality here extraneous to the

contract?

MR WALKER:  No, Your Honour. This is one of those

illegalities which would be normally constituted

by a statutory provision that reads, for example,

"No person shall enter a contract - "

DAWSON J:  You come back then to the question of power.

You say, well, illegality does not really help

you here.

MR WALKER:  Your Honour, I was about to use an example of the criminal

offence of making contracts for the private adoption of

children, where one could truly say that the entry

into of the contract was itself an illegal act.

This is a case of illegality only in the sense that

section 70 is to be construed in exactly the same

was as that kind of crireinal provision, namely, it is wrong, if not an offence, to enter into a

particular kind of contract, or to enter into a

contract without something having happened.

We respectfully submit - - -

DAWSON J: It is directed only to one person really.

MR WALKER:  Yes.

C2T21/l/JM 34 15/9/88

DAWSON J:  So it is a different sort of illegality, is it

not? It does not affect both parties to the

contract?

MR WALKER:	No.
DAWSON J:	Which is the case where you are contracted to do

something which is forbidden.

MR WALKER:	Yes.
DAWSON J:	They are not contracting to do something here

which is forbidden, because you get back to your

argument then: the power is there.

MR WALKER:	Yes.
DAWSON J:	The legislature could have couched section 70

in terms of power; it chose not to do so. Then

you look to the rest of the Act to see whether

it should be construed as doing so.

MR WALKER:  Yes. Your Honour, thatp::rhaps provides an

answer for the present case, although not complete,

I would concede, to what your brother Justice Brennan

raised with me earlier concerning what I apprehend

is a Malayan. case. There are obvious difficulties

in answering that question fully now, but one would

need to see, Your Honour, what scheme was set up

for the enforcement of the licensing provisions;

why the licensing provisions from the face of the

Act were considered so important. It does not follow,

in my submission, either as a matter of authority,

or as a matter or principle, that every time one

breaches a licensing provision, and does an

ordinary civil act, such as a contract, without

that licence, that the ordinary civil act is

thereby nullified. Your Honour, I would have to

return to that example.

DAWSON J: Put it this way: if the ABC has power to enter

into the contract, then it cannot be an illegality.

MR WALKER:  Your Honour, much may depend on how one

defines "illegality" in that expression and

what one means by "power". I have the power to

strike another person, but it is almost certainly

an illegality. "Power" there becomes mere

ability, but mere ability is almost what I am

talking about when I talk about a corporation's

power.

C2T21/2/JM 35 15/9/88

MR WALKER (continuing): There are hidden concepts of

rightfulness in saying that a corporation is

empowered to do X, Y and Z. In my submission,

it is very plain that corporations can commit

crimes, so it is clear that they have powers to

do things which are, in themselves, illegal.

DEANE J:  Indeed, the contract itself might be a criminal

conspiracy - - -

MR WALKER:	Yes, Your Honour, it may be part of an overt act of a - - -
DEANE J:	- - - because it is in breach of the law.

MR WALKER:  Yes. But that is an extraneous question and

can be dealt with in a different way. If one

were then to get into the illegality debate,
which has never been part of the argument of this

case hitherto, one would be faced with all those

distinctions or different approaches about what

is necessary in order to prevent the Court from

lending its support to illegal acts. In my
submission, that is not this case at all, and it
does, at base, continue to come down to a question

of power, that section 70 certainly is not an

illegality in the sense of the taking of

criminality when breached - - -

DAWSON J:  If it is only directory it does not partake

of illegality at all, does it?

MR WALKER:	In a very broad sense, it is wrong for people not to obey provisions which are described as
directory.
DAWSON J:	But not necessarily illegal.

MR WALKER:  Quite, Your Honour. We would accept that

distinction, using those words in that manner.

Your Honour, the financial check provisions of

Part VI do not cease at section 70. Section 72

is a very important provision. It encorporates

a set of ex post facto disciplines which
complement the requirements for ordinary conduct

and for planning of conduct and approval of

conduct in the preceding sections. I do not

know whether Your Honours have the provisions

of Division 3 of Part XI of the AUDIT ACT.

I do have a copy if Your Honours do not have that.

MASON CJ:	No, we have not got that.
MR WALKER:	I apologize for that failure. The heading of that

division, Division 3 at the foot of page 58 of

the reprint, is a somewhat curious heading,

the ABC is one of those:

C2T22/l/HS 36 15/9/88

Public authorities not required to

keep accounts in accordance with

commercial practice -

which does not, however, suggest that it can be

cavalier in its approach to its moneys, as the

succeeding provisions, and indeed the provisions

of its own Act make quite plain. The provisions
of section 63K are salutory, in my submission,

and provide the answer to the question, "Then

how does Parliament seek to enforce the

strictures of section 70?" I do not say

section 63K is the complete answer, but it is

part of the regime which is.

Section 63K is in very broad terms. It is

expected to be complied with and there is no reason

for the Court to approach the construction of

section 70 of the ABC ACT in the gloomy knowledge

that section 63K will be, in fqct, more often

breached than observed. In my submission,

section 63K is something which would normally

lead to section 70 being complied with. If it

is not complied with, the Auditor-General will

descend under section 631, and he has an obligation
which one, again, in my submission, would expect
to be complied with, to draw to the attention

of the appropriate minister any irregularity,

such as the irregularity in this case.

A word of some moment for my argument, the

word "irregularity", used generally to describe,

for example, a defect - if one returns to

section 63K - in t'he ensuring that

all payments are correctly made and properly

authorized, and that is considered under

section 631 to be an irregularity to be drawn

to a minister's attention. Irregularity is

not a words normally used to describe something

done ultra vires.

(Continued on page 38)

C2T22/2/HS 37 15/9/88

MR WALKER (continuing): Finally, 63M requires accounts and

then 63M(2) requires the Auditor-General to look
at those accounts, requires him ~o report to
the minister, requires under 63M(2)(c) the

Auditor-General to check whether things have

been done in accordance with requirements of,

for example, section 70, and finally, the minister

must - and again this will be complied with -

lay that before Parliament. So that the whole

scheme of Part VI of the ABC ACT concludes with

this unfortunate episode being brought to the

attention of Parliament.

Mr Justice Kirby in disagreeing with the

majority in the Court of Appeal considered that
their reasoning led to section 70 having no means
of enforcement in the sense of being justiciable.

In my submission, that is to mistake what is

appropriate in terms of controls on the expenditure

of public moneys. Things need not be justiciable at

the suit of private individuals in order for

them to be complied with and when one is talking

about the conduct of public servants and ministers

it is, in my submission, not a lack of enforcement
to see the battery of checks and scrutiny and

exposure which is comprised by Part VI of the

ABC ACT, incorporating as it does those provisions

of the AUDIT ACT.

That is not a lack of enforcement. It is

simply a parallel stream of financial discipline,

ultimately answerable to the people's representatives,

which does not require the interposition of the

court and, more importantly, does not require

the automatic visiting of the consequence of

nullification on a transaction. It does not

require that consequence, not least because that

consequence in itself does nothing to inspire

improved discipline in the ABC as to compliance

with section 70.

The ABC stands to benefit from its lack

of discipline in this case. Why, given the Godsend

of flexibility in planning and keeping a landlord

on a hook for a very conveniently short time,

why that would be seen as something so undesirable

that the ABC would never risk it again escapes

us, with respect. It clearly, this automatic

nullification consequence, regardless of the

merits of the ABC's provision, is something which

would conduce to strategic breaches of section 70

rather than be a disincentive against them.

DEANE J: This is all a bit artificial, is it not? I mean,

there are such things as breach of warranty and

authority, and so on which I would have thought

any sensible officer of the ABC would be very

conscious of.

C2T23/l/ND	38	15/9/88
MR WALKER:	Yes, Your Honour.	So is there, one assumes,

a desire to act properly as an officer of the

Corporation of the Commonwealth and a desire

to advance one's career by being seen to observe
the strictures of one's position. In my submission,

the proper disciplines of the public service

will, in fact, provide a totally adequate answer

to the so-called lack of enforcement.

DEANE J: If that brings you back to what section 70 is

about - I mean, if what you say about the earlier

sections is correct and a contract is a means

of escaping the net of sections 67, 68 and 69,

there is something to be said for the view that

section 70 limits the extent to which the

contractual escape will be available.

MR WALKER:	Your Honour, the idea of contractual escape -
DEANE J:	Because that is what it is about, is it not?
When you look at it, talking about lease-backs
and so on, it is really aiming at stopping an
escape from the net by creating large scale
contractual obligations. Now, that does not
provide the answer to the problem but it may
provide a relevant context, I would hope.

(Continued on page 40)

C2T23/2/ND 39 15/9/88

MR WALKER:  Your Honour, we would, in fact, gratefully

accept that and hope that it favours our view.

DEANE J:  I would not be so grateful, Mr Walker.

MR WALKER: Well, Your Honour, it is, therefore, to be seen

as ancillary to the financial discipline set up

by 67, 68 and 69; in other words, to outflank
an over-clever approach which would leap over the

estimates, for example, or the commercial leasing

arrangement hit at by 70(1) (b). As such, it would

be, in my submission, curious again to require

invalidation as a consequence when this is an

ancillary provision to a set of provisions which

themselves, particularly 69(2), are on equally

prohibitory terms, are clearly very important to

the public interest of proper expenditure of

public funds and which, in my submission, it

would be unthinkable to interpret so as to have

the consequence of nullification for transactions

in breach and read in that manner, section 70 is

yet another but more specific aiming at the ABC

and saying, as it were, "I've put this net of

69(2) over you. You can't wriggle out by

particular means and, in particular, any large

contracts I want to know about before you get

into them". That fits entirely into a scheme

of financial discipline which is aimed and aimed

solely at the ABC, which may be checked by the

provisions set out in Part VI and then in the

AUDIT ACT and which one may have considerable

confidence will be, in fact, secured as to

compliance by the ordinary expectation that

people will seek to obey the law rather than

to defy it.

Your Honours, section 70 is a prohibition on

receipts of money by the Corporation as well as

payments of money by the Corporation so this is

not simply a control on depredations of public

funds. It is also a control on the augmentation

of public funds and it would be an extraordinary

position, in my submission, if at what I have
called in the written submission, the practical

option of the other party to a contract enriching the Corporation,thatthe whole thing may be called

off and money paid back by way of restitution

under a void contract. I say, at the practical

option because this controversy as to approval

or not by a minister will only arise if the parties

for some reason wish to escape what are, otherwise,

contractual obligations. Section 70 is entirely

even-handed in its concept of payment or receipt

of money and so, in my submission, too much

emphasis should not be laid upon protection of

public revenue because section 70, if it has

C2T24/l/SH 40 15/9/88

the -effect for which my friend contends, could,

in fact, work to deprive the public revenue of

money which is perfectly regularly accepted,

which the minister may not know about but which

he may be only too delighted to approve when he

does come to know about it.

In my submission, if my learned friend's

argument is correct, there would be worked, indeed,

a great mischief into the workings of the ABC.

Nor is it, Your Honours, always as easy as it

ultimately was by a decision of two courts in

this case, to know whether a contract is one

fitting within 70(l)(a). If it is not so easy

to know whether it fits within 70(l)(a) and in

many entrepreneurial contracts one will not know

how much will be netted, however much one hopes

may be netted, then in my submission it is

again a curious consequence that by dint of
future events or matters which will not be known

for some time or matters which require very

obscure accounting, that one transaction will

be nullified and one transaction will be valid.

In my submission, the difficulty of applying the

test is one which urges against making the

consequence of breach of the test so draconian

as nullification of the contract.

There is, of course, the difficulty of the

concept of approval of the minister. It has to

be approval to a contract which, presumably, is

approval to a particular proposal sufficiently

well delineated for the approval to be a real one

rather than one provisionally or in principle or

to a general good idea not yet clarified and so

there arise the potential of obscurities in

construing what is an approval and more or less

administrative law investigations and cases to investigate the status of such approval at the behest of a contracting party who might wish to

perhaps by the ABC in a case such as this. escape an obligation to pay money to the ABC or In my submission, again, those obscurities

tend against an interpretation of section 70 which

lends to its breach the consequence of automatic

nullification. Your Honours, could I then return

to the proper interpretation of the crucial

provision which is section 25 of the Act and

briefly putting what I apprehend Your Honours

have already observed as section 25.

C2T24/2/SH 41 15/9/88

MR WALKER (continuing):  It commences by a very important

expression, which is one, I think, that has been

observed by Your Honour Justice Gaudron already.

The first three lines, the general lines, which

bestow the general power are words of extreme

generality, not apt to be read down unless·_~xpressly so.

One then has particular powers which themselves

are expressed as to some of them in terms of great
generality. We, for our purposes, scarcely need
venture past (a), but there is also (b) which is

important.

I would ask Your Honours to observe the terms

of (c) for comparison with the LANDS ACQUISITION ACT,

when I come to that question. (h) is an emphasis

that these are powers to be construed, in my submission,

beneficially and in a plenary sense, rather than in any

other way. Where section 25 and, we would submit, and

where the Act wishes to limit or to deny powers, it
has done so, (2) being a prime example; (3) being

another example; (4) being another example; (5)

is an example of what is approved by the Corporation

and Your Honours there see that (5)(b) contemplates

entrepreneurial arrangements by the Corporation. Subsection

(7) is a power which is relevant for present purposes

and again is expressed in general terms and is clearly

a beneficial powe~ given its relation to the functions

of the Corporation.

Your Honours, it is therefore important to

observe the very grand-sounding functions given to

the Corporation in section 6, headed, "Charter of

the Corporation." And Your Honours will see that powers-

designed to promote the fulfilment of those functions

are powers which are likely to be construed

beneficially rather than narrowly, Parliament clearly

having required the ABC to act in a very broad and

far-reaching manner.

Section 8 has already been referred to and it is

an important part of the battery of controls which,

in submission, means that the argument we put does

not deprive section 70 of sufficient teeth.

Section 8 is a somewhat curious provision because section 70, having already said the ABC is not to do something, section 8 says, in effect, and the board

shall make sure that it does not do that thing -

8(l)(d)(i).

In my submission, that is a clear indication that this is an Act and this is a Corporation, the

powers of which are full and the particular limitations

by direction or provisions such as section 70 have been

decreed by Parliament safely to be left to the

supervision of the Auditor-General, the managing

director and, in this case, the board. And one, in my

submission, could be forgiven for thinking that

overseers of that kind and in that depth are sufficient

C2T25/l/VH 42 15/9/88

overseers for the Court to be satisfied that

section 70 is not deprived of force nor is

object defeated by denying the consequence of

nullification to its breach. Mr Justice Kirby,

in the court below, fastened upon section 8(3)

as a reason to downgrade its importance in the

policing of provisions such as section 70. In

my submission, that is to, with great respect,

place far too much centrality or far too much

importance on the role of the courts in the

enforcement of all public law, admonitions and

injunctions.

The sanction of Parliament, the sanction of executive contro~ is an equal sanction in some cases and, in many cases, may even be superior to the chances of what may happen in a court of

law. The fact that something is not justiciable

does not mean, in my submission, that anarchy

reigns, and it does not mean that laws need not be obeyed;

subsection (3) if anything, reinforces the

argument we seek to put, that this is a Corporation

which has been given very wide functions, powers

broad enough to discharge those functions, with a

set of both broadcasting and financial provisions

designed to achieve just sufficient nexus with

the executive to ensure that public moneys are

not wasted and that public functions are properly

fulfilled in the national interest.

(Continued on page 44)

C2T25/2/VH 43 15/9/88

MR WALKER· (continuing):  Your Honours, that concludes my

submission on the proper interpretation of section 70
as it applies in the event of the ABC's breach

of it or failure to comply with it.

May I then turn to the question of the LANDS

ACQUISITION ACT.

MASON CJ:  Mr Walker, I should say to you that we do not

need to hear you on the interpretation of

section 54A of the CONVEYANCING ACT. In other words

you need not address us in support of the proposition

contained in the last sentence of your paragraph 12.

Now, just what consequences that has for the remainder

of the argument that is directed to the LANDS

ACQUISITION ACT, you will have to determine for

yourself. It may be that that proposition, in

a sense, goes to the last step in an argument

that is founded, initially, on an interpretation

or operation of the LANDS ACQUISITION ACT.

MR WALKER:  Yes, Your Honour, it does. The submission

we put is that absent any difficulty with the

statute of frauds, that there is nothing in the

argument based on section 66A of the LANDS ACQUISITION ACT. The short reason is that

subsection (3) says there is not and that that

is the end of it and that the plain words of

subsection (3) ought to be allowed to perform

their plain function·, that is not to invalidate -
that is deprive of any force including for the

purpose of getting a verdict at law - any

transaction which does not comply with the

preceding provisions of section 66A. It would

be, in my submission, not to give subsection (3)

the effect which its plain words, as its third

and fourth lines set out - if it were to have any lesser effect than preventing section 66A

affecting in any way the ability of my client

to sue the ABC for breach of this contract made,

ex hypothesi, in breach of section 66A. There is another argument which has been

put below, was accepted by Mr Justice Bryson

and rejected by the Court of Appeal and is put

in paragraph 10 of the written outline which

I have handed up to Your Honours.

MR SEXTON:  Perhaps I can just assist Your Honours by saying

that I think that I conceded in argument that

in the absence of combination with section 54A - - -

MASON CJ:	The LANDS ACQUISITION ACT disappears?
MR SEXTON.	Yes, that is right, Your Honour.
MR WALKER:	In which case, Your Honours, I have concluded my

submissions.

C2T26/1 /SDL	44	15/9/88
MASON CJ:	Thank you, Mr Walker.	Mr Sexton, you are, of

course, entitled to reply on section 54A if you

want to add anything in relation to it. I should,

perhaps, say to you that one possibility may

be that the Court might be minded on considering

the matter, to revoke the grant of special leave

in so far as the grant currently extends to the

combination of the LANDS ACQUISITION ACT point

and section 54A of the CONVEYANCING ACT.

(Continued on page 46)

C2T26/2/SDL 45 SEXTON . 15/9/88

MR SEXTON:  We do not press that point, Your Honours.

MASON CJ: Very well.

MR SEXTON:  Your Honours, there are only two matters I

wish to refer to in relation to the first

submission relating to the AUSTRALIAN BROADCASTING

CORPORATION ACT. The first is that my friend

made some reference to the difficulties of persons

dealing with the Australian Broadcasting

Corporation because of this section. We would

say that the conduct of the parties in relation

to this, or another contract, is not a matter

that is relevant to the construction of the

section if its wording is sufficiently plain,

but it emerged at the special leave application
that there were, I think, some 35 federal statutes

bearing a similar provision and therefore, in our

submission, this is not a matter that, in terms

of professional advisers, ought to be unknown
and indeed, in this particular case, the

confirmation of the agreement that was made in

writing, on the letter that my friend referred to,

by the relevant officer of the Department of

Local Government and Administrative Services, said

that, "I confirm that this is the basis of

agreement reached between the parties in respect of the abovementioned premises and is subject to

relevant approvals". So that, although it has

now been held that there was nevertheless, in

the absence of any statutory provisions, a concluded

agreement, there was at that time even reference

to the approvals on the particular document in

question, or to some approvals, to be more accurate.

The other point, Your Honours, is the question

that was raised by His Honour Mr Justice Brennan

in relation to the effect of the section. In our

submission, although the cases refer often to

the concept of statutory illegality, it would be

equally appropriate to refer to it as statutory
nullity.	Your Honour made reference to the

Court of Appeal, but Their Honours in no case did they take up that particular question

case of CHAI SAU YIN, a 1962 decision of the to the

in the judgment, as Your Honours will have observed.

I have not got those cases here, Your Honours,

but His Honour Justice Brennan has given the

citation. That was, as Your Honour said, a case mvolving

a licence and, by my recollection, the statute

provided that no person shall enter into a contract

without a licence, and was a case in which either
the vendor or the purchaser - I think the vendor -
did not possess the relevant licence and that was

held to at any rate, to use a broad term,

invalidate the contract.

CT27/l/JM 46 15/9/88

BRENNAN J: The prohibition was against not purchasing

and the vendor was defeated.

MR SEXTON:  Your Honour is saying that the purchaser was

required - - -

BRENNAN J:	To have the licence.
MR SEXTON:	To have the licence, yes.  And I think there

is a line of cases of that effect which, I think,

began with the case of MAHMOUD V ISPAHANI which

is a King's Bench decision in the earlier 20s,
following those post-war regulations in the

United Kingdom, again, I think, a case in which a vendor and purchaser and one party did not

have a licence. The other case that was cited

to the Court of Appeal was SYKES V STRATTON,

I do have a reference for that, (1972) 1 NSWLR 145.

That, I think was a decision of Mr Justice Helsham in relation to the foreign exchange regulations

holding that a contract was invalid or

unenforceable because it was entered into in

contravention of those regulations.

Again, not in the same way as the licence

cases where the statute was directed to only

one party to the contract but a case where the

contravention would be the conduct of one party

to the contract. In other words, the payment

or receipt of funds and, presumably, the other

parties to the contract would not necessarily

have been involved in terms of performance in

that illegality.

We would submit that whether one takes the approach of ultra vires or the question of

statutory illegality or statutory nullity that

the effect of section 70, in either event, is

to mean that the Corporation, in this case, was

unable to enter the contract in question. Those

are the submissions on behalf of the appellant,

Your Honours.

MASON CJ:  Thank you, Mr Sexton. The Court will consider

its decision in this matter and will adjourn

until 9.30 am tomorrow in Sydney.

AT 12.20 PM THE MATTER WAS ADJOURNED SINE DIE

C2T28/l/ND 47 15/9/88